Unauthorized Insurance

Unauthorized Insurance

An insurance policy sold by a company that has not received permission to do business in one's state. For example, if Tom lives in Oklahoma and an insurance company only authorized to operate in Texas sells Tom a policy, it has sold unauthorized insurance. Selling unauthorized insurance is illegal.
References in periodicals archive ?
TDI to Agents, TPAs: Strict Liability Applies to Sales of Unauthorized Insurance
A person who in any manner assists directly or indirectly in the procurement of the unauthorized insurance contract could be held strictly liable to the insured for the full amount of a claim or loss under the terms of the contract if the unauthorized insurer fails to pay the claim or loss.
Further, if a company is engaged in unauthorized insurance, TDI may bring an action against an agent or TPA who assists the company whether the agent or TPA knew the product was unauthorized or not.
Defendants then initiated automatic, monthly allotments from the service members paychecks to the bank, from which the unauthorized insurance premiums were paid to the insurance companies.
"Unauthorized Insurance Entities: Knowing the Difference" is a two-hour course designed to better educate students regarding the differences between unauthorized insurers and illegal insurance entities.
Unauthorized insurance companies commit fraud by illegally collecting premiums and disappearing before paying claims.
Jayne McLaughlin, the department's chief of staff, said the company had been fined, quoting the maximum fine for unauthorized insurance activity is $10,000 an occurrence.
The unlicensed reinsurance regulations also state that the carrier cannot use unearned premiums and claims reserves for unauthorized insurance in its financial stability calculations unless the reinsurer supports 100 percent of such amounts with appropriate letters of credit.
IBAO believes the ministry should merely harmonize regulations enacted by the federal government in March 2012 that clarify that online retailing of unauthorized insurance products is prohibited as was originally intended in bank branches.
Full browser ?